China's Lopsided Growth Puts Spotlight on Beijing

AUD

The Aussie Dollar opens a tad higher than majors, boosted by higher trade hopes as Prime Minister Albanese visits President Trump in Washington. Asian equities finished higher on the day, Nikkei +3.4%, Hang Seng +2.4% and Shenzhen +0.5%. Locally the ASX 200 climbed +0.4%, with financials and real estate sectors leading the way with gains of +1.5% and +1.1%. Gold and Silver gained +0.4% while Iron Ore was flat. Yesterday's Chinese data dump showed key lending rates held steady, as expected, and a slowdown in GDP. The world's second-largest economy grew at an annual rate of 4.8% in the third quarter, slightly above estimates. A closer look at the data shows families are reluctant to buy more, businesses are spending less and the only reason growth hasn't collapsed entirely is that Chinese factories are flooding the world with exports at record levels, intensifying trade tensions. No data today. Tomorrow, we'll see the quarterly NAB Business Confidence report.
 

USD

AUD/USD touched 5-day highs of 0.6521 overnight before opening today at 0.6515, with the AUD benefiting from trade talks between PM Albanese and President Trump. A strong start to the week on Wall St. saw the Nasdaq trading +1.5%, the S&P 500 +1.2%, and the Dow Jones +1.1%. No U.S. data overnight, with the next key event being consumer inflation reports on Friday evening. They key driver for the USD this week will likely be what seems to be the end of the fragile and tentative trade truce between the U.S. and China. The market recognises this as a headwind for the U.S. economy. The futures market has a 25bps interest rate cut fully discounted for later this month and in December and has begun to rethink about a potential 50bps cut at one of the last two Fed meetings of the year.
 

EUR

AUD/EUR has gained 0ver 1.5% from Friday's lows, opening today at 5-day highs of 0.5595 with the AUD benefiting from trade talks between PM Albanese and President Trump. The DAX gained +1.8% and CAC gained +0.4%. Overnight, German PPI data showed a monthly decline of 0.1%. Tonight, European Central Bank President Lagarde will be speaking. Eurozone Flash PMIs are set for release on Friday evening.
 

GBP

AUD/GBP has moved 1.3% higher from Friday's lows, also opening today at 5-day highs of 0.4859. The FTSE gained +0.5%. A quiet start to the week. UK CPI is set for release tomorrow afternoon. The annual figure is expected at 4.0%, up from last month's 3.8%. 
 

NZD

AUD/NZD opens at 1.1338, holding a 1.4% range over the past four weeks. Kiwi CPI was released yesterday, with consumer prices up 1.0% in the September quarter, the annual rate being 3.0%, the highest since June 2024. Inflation edged up in the back of higher rents, rates, electricity and food.